For Poles, easing US sanctions means little more than herring

ByEric Bourne, Special to The Christian Science MonitorNovember 4, 1983

Vienna
— America's ''slight easing'' of sanctions against Poland may conceivably put more herring, a very popular holiday meal, on the plates of Polish families this Christ-mastime - at least, more than last year.

It also has some importance for the Polish government.

Lifting the ban on Polish fishing fleets in United States waters - as Washington is about to do - is the first step to regaincc7ping a commercial facility formerly worth some $260 million a year.

Canceling the permits cost the Poles not only contracts with US food processors that earned Poland hard currency, but also vital supplies of fish meal for animal feeding and an annual quota of 10,000 tons of fish normally earmarked for Polish tables.

But this is, so to speak, only a fish in the ocean, and a minor step toward any real normalization of intense economic relations with the West, particularly with the US. These have been in virtual abeyance since sanctions were imposed in response to martial law in December 1981.

Nor will rescheduling part of Poland's $11 billion debt to Western governments make much difference to its overall economic situation while more damaging restrictions remain in force. And, judging from the words coming out of Washington this week and how it views the current situation in Poland, these restrictions seem likely to remain for some time.

The West Europeans were prepared to renegotiate since early this year. A month ago, the 15 states making up the so-called Club of Paris agreed the time had come to set a date for starting talks with the Poles.

The argument was one already adopted by Western commercial banks when they agreed in August to reschedule interest payments due this year. Without renegotiation, they said, or by putting the Poles in default, they risked getting back none of their money at all.

At that meeting, the banks also loaned as short-term credits 65 percent of what the Poles agreed to pay, which is what the latter would like their Western government creditors to do as well.

But making it easier for the Poles to pay part of what they owe will not mitigate the damaging effects of sanctions overall.

The financial and aid restrictions, President Reagan has said, will continue in force. So, too, will the ban on transfer of high technology, the stop on landing rights in the US for the state airline, LOT, and suspension of Poland's almost traditional most-favored-nation (MFN) trading status with the US.

The economic restrictions not only precluded credit-purchasing of US grain and stock-raising foodstuffs which Polish agriculture had depended on for years. They also cut off supplies of raw materials and components on which important industries were equally dependent, bringing many plants almost to a standstill.

Suspension of MFN, according to the Poles, has driven at least half of their products out of the American market and caused a fall in total Polish export from $320 million in 1981 to a mere $95 million in the first half of this year.

The technological controls have denied Poland equipment and licenses that had been the base of the development boom of the '70s - and whose continued availability, at least in terms of items like spare parts, remains an obvious essential to recovery.

A Warsaw statistical journal said in August that the stop on credit caused overall production loss in industry last year of some $13.3 billion and is expected to mean a further $7.5 billion loss this year. Between early 1981 and midterm this year, the NATO states' share in Poland's foreign trade fell from 23 percent to 14 percent in Polish imports and from 30 percent to 19 percent in exports.

Such figures pose politically significant questions for the future.

Soviet assistance, Poles say, cushioned the sanctions' ''worst effects.'' But only the worst. It reduced the former ''overdependence'' on the West, they say. The West is condemned as a major factor in Poland's economic breakdown, leading to the rise of Solidarity in 1980.

Imports of Western goods and services have fallen from a 1975 all-time high of 28 percent of national income to a mere 8.6 percent last year. For the first time in over a decade, Poland has a trade surplus with the West - but scarcely enough even to cover current debt servicing. There is no margin for buying new technology.

At the same time, Warsaw has run up an immense deficit with its bloc allies (principally the Soviet Union).

But to begin reducing debts and liabilities to either East or West, Poland has to increase and improve its exports. To do so, however, it will need fresh credit at least for the next few years before it can hope to be more export-effective in the hard-currency area where it counts.

There are no signs that more Soviet aid will be forthcoming.

Moreover, even if Western governments now negotiate over the debts, fresh credit is almost certainly not going to be any part of the deal. It is unlikely to come into the picture for some time.

In the meantime, Poland's dollar earnings will have to cover both debt servicing and the cash purchase of necessary items like the 3 million to 3.5 million tons of grain foreseen in next year's plan.

For the rest, Poland is counting on ''another year of respite'' from its allies. But the longer Western sanctions continue, the tighter the Eastern clamp on Poland fits.